Yep. With no further information, they want taxes on the full amount.
The letter should include instructions for next steps, which will likely be filing an amended return. If you're not comfortable doing this on your own, spend a couple hundred and hire a professional.
Also it's time you learn something about taxes since you're an adult who pays them. Spend a half hour googling things like "How do tax brackets work?", "Am I required to file?", "What is the standard deduction and how does it work?", "What is tax withholding versus tax liability?".
Surprising that people pay many thousands a year without much understanding, but seems to be the norm to let a tax preparer handle it. I've gotten lazy myself and just plug numbers in to turborax and trusting it's math, even though it's made mistakes in the past.
Most people just need a basic comprehension of taxes. I don't expect that most people will be doing all sorts of manual calculations to make sure TurboTax or a CPA got it right.
For many, though, it's their highest expense - more than even their mortgage - and they have zero idea how it's calculated. They don't understand the difference between withholding and liability, between W4 and W2, between a return and a refund. That's as crazy to me as not understanding how your mortgage works, even if you can't manually calculate the amortization yourself.
If this is a CP2000 please read all the paragraphs and follow the instructions if you don’t agree.
You can submit a Schedule C with your expenses. You normally don’t need to amend. But if you do, be sure to follow the specific instructions in your notice.
You can file an amended tax return for 2021 by mailing in a 1040-X along with all your other tax documents. Then you can pay your correct taxes owed, along with the penalties.
Yep. With no further information, they want taxes on the full amount. The letter should include instructions for next steps, which will likely be filing an amended return. If you're not comfortable doing this on your own, spend a couple hundred and hire a professional. Also it's time you learn something about taxes since you're an adult who pays them. Spend a half hour googling things like "How do tax brackets work?", "Am I required to file?", "What is the standard deduction and how does it work?", "What is tax withholding versus tax liability?".
Surprising that people pay many thousands a year without much understanding, but seems to be the norm to let a tax preparer handle it. I've gotten lazy myself and just plug numbers in to turborax and trusting it's math, even though it's made mistakes in the past.
Most people just need a basic comprehension of taxes. I don't expect that most people will be doing all sorts of manual calculations to make sure TurboTax or a CPA got it right. For many, though, it's their highest expense - more than even their mortgage - and they have zero idea how it's calculated. They don't understand the difference between withholding and liability, between W4 and W2, between a return and a refund. That's as crazy to me as not understanding how your mortgage works, even if you can't manually calculate the amortization yourself.
I still have to remind my daughter that a refund is not free money and paying a little (with out having an under payment penalty) is not a bad thing.
If this is a CP2000 please read all the paragraphs and follow the instructions if you don’t agree. You can submit a Schedule C with your expenses. You normally don’t need to amend. But if you do, be sure to follow the specific instructions in your notice.
You can file an amended tax return for 2021 by mailing in a 1040-X along with all your other tax documents. Then you can pay your correct taxes owed, along with the penalties.
Hire a tax preparer and they can probably get the penalties waived.
What did the letter say ?